Replying to Avatar pbl

It’s a payment channel. When a channel is opened it is an on chain transaction and when a channel is closed it’s an on chain transaction.

In between those two events the channel is like a bar tab but instead of putting a card on file in tradfi lightning uses multisigs and htlc
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LibertyImp 1y ago

I understand that it's payment channels but the going off-chain bit seems like a bad idea to me, it seems like it could open the door for some shenanigans.

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pbl 1y ago

The multisig, and hashed time lock contract get very close to zero shenanigans. Only when running a ln node have I run into the hiccups of always have to be online which may result in forced closed channels if your down for long and inbound/outbound liquidity management. If you don’t run a lnnode or use non custodial wallet. Custodial wallets are it’s pretty seamless but trade off is custodial wallet